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USD/CAD is holding on to gains above the 1.3500 level, comfortably above the 100-day SMA

  • USD/CAD defends the 100-day SMA and bounces from the 1-month low reached on Thursday.
  • Looming recession risks weigh on investor sentiment and benefit the safe-haven USD.
  • A rally in oil prices could support the CAD and cap any significant advance in the pair.

The pair USD/CAD It attracts some buyers near the support of the 100-day SMA and staged a modest bounce from the 1-month low hit earlier this Thursday. The pair is holding on to its intraday rally gains during the European session and is currently trading just above the psychological level of 1.3500.

Softer risk tone helps safe-haven US dollar to regain some positive traction, which in turn pushes the USD/CAD pair higher. Despite the relaxation of strict COVID-19 restrictions in China, concerns about a deeper global economic recession continues to weigh on investor sentiment and keep any optimism in the markets at bay. That being said, a combination of factors could prevent dollar bulls from entering aggressive positions and limit further gains in the pair, at least for now.

The minutes of the December FOMC monetary policy meeting showed that officials unanimously supported raising borrowing costs at a slower pace. The prospects for minor rate hikes by the Fed are bolstered by the fact that US Treasury yields remain close to the three-week low reached on Wednesday. This should act as a headwind for the USD. Apart of this, a rebound in crude oil prices could support the CADa commodity currency, and justifies caution for USD/CAD bulls.

The US economic agenda includes the publication of the ADP report on employment in the private sector and the usual weekly initial claims for unemployment benefits. This, coupled with US bond yields and broader risk sentiment, will boost demand for the USD and provide some momentum to the USD/CAD pair. In addition, the dynamics of oil prices could help generate opportunities in the short term. However, attention remains focused on the monthly employment data for the US and Canada, which will be released on Friday.

USD/CAD technical levels


Last price today 1,351
Today I change daily 0.0028
today’s daily variation 0.21
today’s daily opening 1.3482
daily SMA20 1.3598
daily SMA50 1.3525
daily SMA100 1.3465
daily SMA200 1.3138
previous daily high 1,368
previous daily low 1.3476
Previous Weekly High 1.3612
previous weekly low 1.3484
Previous Monthly High 1.3705
Previous monthly minimum 1.3385
Fibonacci daily 38.2 1.3554
Fibonacci 61.8% daily 1.3603
Daily Pivot Point S1 1.3412
Daily Pivot Point S2 1.3342
Daily Pivot Point S3 1.3208
Daily Pivot Point R1 1.3616
Daily Pivot Point R2 1,375
Daily Pivot Point R3 1,382

Source: Fx Street

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